Currency held within banks is part of:
A. both the M1 and M2 definitions of the money supply.
B. the M2 definition of the money supply only.
C. the M1 definition of the money supply only.
D. none of these definitions of the money supply.
D. none of these definitions of the money supply.
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A partnership requires the agreement of most or all partners to any major decision.
Answer the following statement true (T) or false (F)
If government spending were to increase we expect that the aggregate demand curve will:
A. shift straight down. B. shift to the right. C. remain unchanged but the economy will move down along the curve to a higher quantity. D. remain unchanged but the economy will move down along the curve to a lower quantity.
By reducing income taxes, more money is put into the hands of people who will spend part of it on more goods and services. This shifts the aggregate demand curve outward
Indicate whether the statement is true or false
Which one of the following is an area of continued disagreement among modern macroeconomists with regard to the use of fiscal policy?
a. Automatic stabilizers help reduce the fluctuations in aggregate demand and output. b. It is difficult to time changes in discretionary fiscal policy in a manner that will promote stability. c. Fiscal policy is much less potent than the early Keynesian view implied. d. Budget deficits are a highly effective tool with which to combat a severe recession.